BACKWARD INTEGRATION POLICY AND ITS EFFECTS ON DANGOTE CEMENT INDUSTRY IN NIGERIA: A STUDY OF OBAJANA CEMENT INDUSTRY IN KOGI STATE BETWEEN 2015 AND 2020

Abstract

The study examined backward integration policy and its effects on Dangote Cement industry, focusing on the Obajana Cement Industry in Kogi State, Nigeria between 2015 and 2020. The study specifically sought to evaluate the extent Dangote Cement Industry has implemented the backward integration policy for the production of raw materials such as limestone, determine the impact of the implementation of backward integration policy  on the growth and development of the cement industry, investigate the wider economic benefits of backward integration policy and identify the challenges and limitations of backward integration policy  in promoting industrial development in Dangote Cement Industry.  The study adopted descriptive statistics of simple percentage, mean analysis and Analysis of Variance (ANOVA) to analyze the data. The study revealed the extent Dangote Cement Industry has implemented the backward integration policy for the production of raw materials included  the construction of a cement plant, investment in transportation infrastructure, partnership with local communities and training and development of local employees.  Also it revealed that the implementation of the backward integration policy impacted on the growth and development of the Dangote Cement Industry. It was found that the wider economic benefits of the backward integration policy in Dangote Cement Industry in Kogi State included; increased export revenue, increased government revenue, technology transfer, improved infrastructure, improved energy security, economic diversification and local content development and social responsibility. It was also discovered that the challenges and limitations of backward integration policy in promoting industrial development in Dangote Cement Industry included high capital expenditure, lack of local expertise, infrastructural deficits, inadequate regulatory framework, dependence on external suppliers and environmental and social impact. It recommended that the government should prioritise the development of local expertise in areas such as engineering, mining, and logistics.